Assume that l2t = 0.15% and that l = 0. If the one-year interest rate is 5% and the two-year interest rate is 5.75%, then i is equal to: %3D %3D ++1 O A. 5.15% O B. 5.60% O C. 6.20%

Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter17: Capital And Time
Section: Chapter Questions
Problem 17.7P
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Assume that lat = 0.15% and that l, = 0. If the one-year interest rate
%3D
%3D
is 5% and the two-year interest rate is 5.75%, then i is equal to:
++1
O A. 5.15%
O B. 5.60%
O C. 6.20%
O D. 5.90%
Transcribed Image Text:Assume that lat = 0.15% and that l, = 0. If the one-year interest rate %3D %3D is 5% and the two-year interest rate is 5.75%, then i is equal to: ++1 O A. 5.15% O B. 5.60% O C. 6.20% O D. 5.90%
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